One of five Britons seized by a Shiite extremist group could be freed "very soon" under a deal to win release of militant leaders held in US custody, a report said.

One of five Britons seized by a Shiite extremist group could be freed "very soon" under a deal to win release of militant leaders held in US custody.

A senior aid to Prime Minister Nouri al-Maliki acknowledged today that contacts were under way to release the five Britons, who were taken hostage in May 2007, but denied a deal had been struck.

The widely read Saudi-owned Elaph Web site quoted a leader of the extremist Asaib Ahl al-Haq, or League of the Righteous, as saying that a video sent this month to the British Embassy in Baghdad showing one of the hostages was part of the deal.

Elaph quoted a leader of the group, identified only by his nickname Abu Ali, as saying the deal was being mediated by an unidentified Iraqi law maker.

Abu Ali said that first 10 of the group's members would be released in return for one of the Britons. If that went well, others would be released in stages, the report said.

The first group would include Laith al-Khazali, brother of the league's founder Qais al-Khazali, Elaph said.

The final exchange would free Peter Moore, an information technology consultant, in exchange for Qais al-Khazali and Ali Moussa Daqduq, a Lebanese Hezbollah commander who was captured in Iraq in 2007.